STOCKS RALLY, S&P CLOSES AT ALL-TIME HIGH: Here's What You Need To Know

Motorcycle rider Robbie Knievel checks out the ramp
prior to jumping over seven military aircraft on the flight deck
of the USS Intrepid in New York, July 31, 2004.REUTERS/Chip East

Thanks, Ben Bernanke!

First, the scoreboard:

Dow: 15,460.9,
+169.3,+1.1%

S&P 500: 1,675.0,
+22.4, +1.3%

NASDAQ: 3,578.3, +57.5,
+1.6%

And now, the top stories:

Stocks had a nice big up-day with the S&P 500 closing at
an all-time high. The previous all-time closing high was
1,669.1 on May 21, 2013. The current all-time intraday high was
1,687.1 on May 22.

The rally actually started around an hour after yesterday's
close. Speaking at the NBER conference in Cambridge, Mass.,
Federal Reserve Chairman Ben Bernanke offered some answers
to some burning questions about the current state of monetary
policy. He said that even though the Fed may begin
tapering its quantitative easing program soon, interest rates
will still be pinned at current ultra-low levels for a long
time. He also noted
that the unemployment rate – a key indicator that will
determine the future path of Fed monetary policy – probably
understates the weakness in the U.S. labor market.

Immediately after these comments,
U.S. stock market futures spiked, the dollar sunk, and gold
rallied.

Initial jobless jumped to 360,000 this week, which was a
bit higher than the 340,000 expected by economists. However,
economist Jim O'Sullivan warned that we should ignore this
report because it tends to be a noisy week. "This is likely to
be one of those weeks, due to the challenge of seasonally
adjusting for annual plant shutdowns in the auto industry,"
said O'Sullivan. "The bias has generally been downward in the
first week of the annual shutdowns in recent years, with the
seasonal factors over-adjusting for shutdown-related filings.
"

"Some of the swing in the budget
in today’s report for June will be exaggerated by calendar
quirks and a payment from Fannie Mae, but the trend is clearly
toward improvement," said High Frequency Economics' Jim
O'Sullivan before the statement was released. "The deficit has
dropped to an estimated 4.4% of GDP in the past four quarters
from 8.0% in the previous four quarters and more than 10% at
the peak in 2009. The downtrend has reflected strength in
revenues as well as weakness in outlays. Some of the strength
in revenues is the result of higher tax rates, but the data
also suggest that GDP may have been undercounted."